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Chapter 8: Horizon sells new cell phones that they warranty against defects for one year. Horizon estimates 4% of Sales will be the cost
Chapter 8: Horizon sells new cell phones that they warranty against defects for one year. Horizon estimates 4% of Sales will be the cost of making good on the warranty. Horizon sales for the year is estimated to be $400,000. During the year, Horizon paid $3,000 to fix the bad cell phones under the warranty agreement. Prepare the entry to record the estimated expense of the warranty.
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